As advised, you should accept the return and refund when you get the item back.
It doesn't matter that you stated the item was untested - Ebay defines a 'used' item as something that is working:
Used
An item that has been previously used. The item may have some signs of cosmetic wear, but is fully operational and functions as intended. This item may be a floor model or an item that has been returned to the seller after a period of use. See the seller’s listing for full details and description of any imperfections.
"There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true.”
Søren Kierkegaard, Danish philosopher (1813 - 1855)